Strategic Risk reports here that commercial insurance buyers continued to enjoy favourable (decreasing) prices in the last quarter of 2009.

As we have reported before, the insurers have been trying to talk the market up and get premiums on an upward curve but when push comes to shove they are not following through. Sure, the bosses and shareholders of the insurers would love to see increased revenue, but they have to face the realities of low claims ratios.

They have also had to accept that there are less businesses around and they continue to fight for business. We had a pub insurance policy due for renewal on the 12th January, overall premium last year was just a shade over £3,000. The existing company wanted to increase by nearly 5% as a result of index-linked increases to the business buildings insurance portion of the cover.

A quick check on two alternatives showed the market figure was nearer £2,500. We advised the holding company and they immediately capitulated and offered at £2,400 because they want to keep profitable business.

It is also reported that brokers incomes are reducing because, in the main, they earn fees as commission in placed cover. The credit crunch and worldwide recession was a perfect storm for the banking community. We are in the midst now of the insurance equivalent. Whilst we will not see insurers or brokers going to the wall, some will fall by the wayside through below market value mergers and acquisitions throughout 2010.

It has been reported by Insurance Times that the Financial Services Authority, is looking to apply massive, 100%+, increases in the fees paid by some personal and business insurance brokers.

Whilst at this stage it is just proposals you do just have to sit back and wonder which floor in the ivory tower they had the meeting when they decided this might be a good idea?

Given the exceptional problems that have occurred in the financial community world wide over the past 24 months, you only need to look at insurance brokers to realise that there are some financial services firms that operate quite nicely.

Brokers perform the same role that they always have done. We are now coming up to the fifth anniversary of FSA regulation. Of course, it was nto welcomed with open arms, but we rolled our sleeves up and got on with it. Whatever they asked for, we did. Yes we debated and argued the point on a few strange suggestions, but on the whole in the past 5 years we have done very well.

It looks now as if we are being penalised due to the exceptional costs that the FSA has had in changing from it’s soft touch regulation on the banks. It would be nice, in a Daily Mail reader type of way, if some of the billions of pounds that wil be raised in the one off bankers tax could go back into the body that was supposed to regulate them, but dreaming is something I do not have time for.

Maybe in the face of complaints the FSA will listen, with inflation where it is, 100% increases on fees really does look out of place, does it not?

What does this really mean? Usually it evokes images of old fashioned factory style buildings or modern concrete block and steel industrial units.

But, at the highest level you can split properties into two types. Those used for residential purposes (whether owner occupied or not) and all others.  Everything that falls into the “all others” category can usually be covered under a commercial property insurance policy. In addition to everything that fall under the all others umbrella there are properties which would normally be covered under a residential property owners insurance policy which are more suited to a commercial package.

For example, long term unoccupied or untenanted, those undergoing refurbishment, those where significant rental income is  received from tenants are all the types of buildings that are better covered on a commercial basis.

The other key thing to mention is that you do not have to earn an income or a profit from a building to cover it on a commercial basis. If your policy is due for renewal, it wouldn’t do any harm to speak to an broker, explain the risks, and let them come back to you with different options.

The reason for speaking to a broker is because it is so easy nowadays to get an alternative quote. Gone are the days when it took days and you could only get a quote from one company after filling in a proposal form. In 2010, you just need to stick your search term into Google, choose UK (as you need a UK insurer to cover you) and find a broker that has a website you feel confident with and, most importantly, check that they are independent. If not, you are just getting products from one or a very restricted range of insurers which, if you are looking for alternatives, is as useful as a chocolate fireguard.

UK commercial insurance companies do like to think of themselves as forward thinking, modern and progressive. Having worked in the industry for more years than I care to remember, this is a serious change over the last 25 years.

But, they all do one thing that makes me wonder whether they could perhaps change for the better. It is only a small change, but it refers to the name tradesmens insurance.

These policies are sold in great numbers to the vast army of trades persons and artisans that operate throughout the UK. The small change they should make is to take the men out of the title and call it trades persons. When these policies were first sold in the 1970’s you can see why they got their name, but the world, and equality, has moved on.

So, what is the point of the policies and what do they provide? Basically, they are combined liability insurance policies, offering the option of public and employers liability along with some tools and equipment cover. They are good because they are cheap, can cover up to ten members of staff (selected insurers only) and can give fairly high limits of indemnity. The list of trades covered is ever growing and they are priced on a “per capita” basis making the provision of quotes, easy and quick.

We have blogged and twittered in the past about 2010 being the year of opportunity. 2008 started off well, then in quarter 3 everything seemed to grind to a halt. The credit crunch, which was the problem at the time, put the brakes onto consumer spending and this continued for many, many months.

Whilst I would never say good riddance to a particular year, 2009 has to come closest. Nothing, in a business sense, could go right. The Christmas non-spending hangover lasted much longer than any retailers thought, house prices where not at all stable and even the barbecue summer promised by the Met Office didn’t materialise. So, 2009 was tough but it was a great learning curve and everyone in business learned some wonderful things about how to balance their P & L’s a bit better.

This led us to say that 2010 is a year to make the most of. If you are going to start a business, what better time to start than now? Commercial rents are still low, banks (if you look around long enough) are prepared to lend, some of the older businesses that were saddled with huge debt have gone, leaving gaps in the market.

Only you will know what type of business is best to start. What we can do is provide help and input to your business planning process. If you go to the banks they will, quite rightly, ask for a business plan.

One of the key things in the business plan, is how much your outgoings are likely to be over one to three year. One of the outgoings is your business insurance. All you need is an indication or idea of the costs. We are quite happy to help you with these estimations. Any commercial insurance quote we provide must be based on a real location with proper estimates of business activity. But, we can also give you a non-binding indication of premium which at least lets you know, at any given time, what the “ball park” costs will be for your business. And the costs for this service? Nothing, of course. Obviously we hope you come back when the real business is up and running, but at this stage we are happy to help you with your planning process.

One of the many things that will prove, in years to come, that UK plc has a resilient economy, is the wide spread in the different types of industries and trades. From shops, hotels and offices to manufacturing and industrial, there are many hundreds of thousands of businesses in operation.

Along with the pleasures of running your own business there are headaches and significant amounts of administration that need to be taken care of. One of these is arranging suitable protection for the business in the event of a loss. Through a good business insurance broker, you can get a quote for most types of business on a package basis. A package basis is a standard policy which includes the covers usually associated with your particular trade.

This is suitable for businesses such as retail, leisure, professional and food. But, what do you do if you are looking for a factory insurance quote? Whilst there are not so many package policies available, you can get a bespoke policy put together which provides the cover you need. Working with a broker, who will provide you with professional advice, is the best way forward. They will explain the types of cover you need, what is available, what it costs and what the terms and conditions are.

In a word…..yes.

You may be surprised to learn, that the fluffy white flakes that have been falling across the UK this week, could destroy a building.

It will be extreme of course for there to be enough snow on a building to damage it. But, it does happen, particularly with wet snow that accumulates over time.

Within a standard business insurance policy, you will be covered for a range of perils. One of these, is storm. This where you will get the cover for damage to your building and, if applicable, damage to the contents. For example, if the weight of snow collapses your roof, this could in turn damage contents and/or stock. The proximate, or ultimate, cause of the damage was the snow, or storm. But, you need to be aware that if your insurers inspect any damage and note that this was attributable in any way to lack of maintenance, you could have your claim repudiated.

What this means is that if you have a roof that is not a good condition, if it can be proven that this contributed to the loss, then you will lose out financially.

You should always check your policy wordings, terms and conditions. In particular, for any flat felt roof portions. Flat felt roofs are usually to be inspected at least once every two years with any damage rectified by a competent contractor. You will be asked for proof of this in the event of a loss.

Flat felt roofs are really susceptible to damage from water, snow and ice. All they are is a couple of sheets of asphalt on timber board. For this reason insurers do not like to insure flat roofs, without particular conditions.

Check your wording or, if easier, give your broker a call and ask them what conditions apply to your cover. Commercial building insurance policies normally have more onerous terms and conditions applying than a home policy. The bonus is that you buy this through a broker so they are obliged to give you help and advice over the phone.

Businesses of all types have developed over the years and the same can be said for the protection products (insurance) that have been produced.

In the sixties and seventies, in the UK, it was a real treat to actually go out and eat somewhere that was a) not someone else’s house and b) outside on a tartan rug or a beach. Going to a restaurant was a once a year event, if that. Nowadays though eating out in a restaurant or buying food from a takeaway outlet is something that we are all used to, whether we like it or not.

As businesses have grown and the number of food serving establishments have grown, so has the need for products such as takeaway insurance policies.

Most commercial insurance policies provide two, very broad, types of cover. Liability insurance and business assets (buildings, contents and stock) insurance.

If you have a takeaway and need to arrange a policy, you want to make sure that you have some of the covers that are sensible to have. We are not saying that only you will need them as they may apply to other similar  businesses. For example, you need to think about shop front glass cover, malicious damage to shutters, public liability, commercial legal expenses and even equipment breakdown cover.

The best way to get the correct policy you need is to speak to an independent business insurance broker. The key is that they are independent, if not you will not be getting a fair quote from a number of insurers.

The Register (always a good read and worth bookmarking) reports on President Sarkozys’ “idea” to tax the search engines. He does have a habit of delivering on his thoughts, so lets wait and see.

Here in the UK, with a PM who apparently does not even own a mobile phone (he would only throw it at someone) and has a civil servant to do his Twitter posts, we cannot expect such forward thinking ways to reduce our debt mountain (if only it were a rock salt mountain….).

So, whoever wins the election in March, April or May this year, they are going to have to make some tough choices. These will involve increasing taxes and making cuts in spending, one or the other is not enough, it has got to be both.

One of the worries we have, as far as business insurance is concerned, is that if it is a Labour victory (don’t discount it, however scary it may seem) then they will look to increase taxes disproportionately.

Commercial, liability and professional indemnity insurance is subject to insurance premium tax. The current rate is 5%, we charge this on every premium. The insurers collect it and pass it on to the Chancellor of the Exchequer.

The most recent years figures are 06/07 when IPT contributed £2.3 billion to UK plc. Our concern is that as businesses start to recover from the worst recession in living memory, a new labour government will look to increase IPT.

Rather than out French cousins who are looking to tax companies that are not paying tax on revenue earned in France, the UK tends to just go back to the tried and tested method of hammering businesses.

Let us hope, whoever wins (although we already know, nod, nod, wink, wink) that they are a bit more creative in where they look to increase the revenue.

We have had a lot of rhetoric from industry leaders, saying that premiums charged, particularly when getting a business insurance quote need to increase. We have had years and years of increasing claims, reducing investment income and increased competition driving rates down. On top of this we have had the UK recession which has caused, in our estimation, a 10% drop in commercial gross written premium.

None of this has had a real affect on the rates being charged. Insurers are still fighting for business, there is more of a concerted effort to charge higher premiums but this is not consistent. If an insurer holds a piece of business and are faced with the prospect of losing it, they do tend to capitulate on price.

But, we are already seeing a significant number of claims coming through this week. Buy to let insurance is one area where we are seeing burst water pipe claims being submitted on a daily basis.

This is starting to spread though and we are getting water damage claims of all sorts for all types of policies, particularly our hotel insurance packages.

On the news last night there were stories of significant claims in the farming community for collapsed buildings due to weight of snow.

Over the past few years insurers have been very lucky throughout the mild winters with claims level very low. This has now changed and maybe, this will give them a big jolt as they realise that uneconomic pricing cannot continue.

Time will tell of course, but maybe this cold snap is the thin end of the wedge.